This Brazilian oil stock could give a 60% return, says Morgan Stanley

Pelican Press · 2024-08-26T14:00:38+0000

This is the hidden content, please Sign In or Sign Up This Brazilian oil stock could give a 60% return, says Morgan Stanley Investors in Petrobras could see a 60% total return on their holdings, according to Morgan Stanley. Analyst Bruno Montanari upgraded ********* depositary receipts of the Brazilian oil stock to overweight from equal weight and upped his 12-month price target by $2 to $20. That means the stock could climb 39% over Friday’s closing level. So, how does the analyst find that eye-popping 60% figure with an upside that’s notably below that? Total return includes dividend income plus capital gains. Here’s how Montanari adds it up: About 37% from share price appreciation. Roughly 16% from regular dividends. Another 7% from extraordinary, or one-time, dividends. Montanari noted that Petrobras’s investment case hinges on the dividends. While that’s tied to capital allocation, he said Morgan Stanley’s multi-scenario analysis uncovered the company’s ability to release a total of about $7 billion in equal one-time payments in the fourth quarter of 2024 and 2025. “Strong cash generation profile is PBR’s key differentiation vs. peers on a global scale, providing more than enough funding for dividends in the coming years,” the São Paulo-based analyst wrote to clients in a note on Sunday. That can help boost investor confidence with shares 16% below their 52-week high set last February. Morgan Stanley noted that, through Friday, Petrobras was little changed over the past five months. The stock climbed as much as 4.9% in early trading Monday, but is still down almost 6% on the year. This is the hidden content, please Sign In or Sign Up #Brazilian #oil #stock #give #return #Morgan #Stanley This is the hidden content, please Sign In or Sign Up This is the hidden content, please Sign In or Sign Up

By Pelican Press,
August 26, 2024 in World News

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Posted August 26, 2024

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